World’s largest management consulting firm Accenture is at the forefront of helping companies adapt to digital age. It is the only management consultancy firm of repute that has well diversified business in IT and outsourcing. Donniel Schulman, global managing director, products functional excellence & integration, Accenture, spoke to Abhineet Kumar on how digital transformation is affecting companies in India and abroad. Edited excerpts:
India’s consumption story has seen some setback with economic growth slowing down. How do you foresee this recovering?
In India there are two sets of consumption-led industries: one that is purely consumer-facing (consumer goods, retail, etc.), which has witnessed a slowdown due to the stress in economy. However, this slowdown is not as acute as some of the more derive-demand industries, which are dependent on infrastructure growth. So, if infrastructure grows, industrial equipment grows because they derive their demand from this. If infrastructure grows, the automotive industry grows, especially the commercial vehicles segment. So these are two broad segments — pure customer facing industries and consumer industries, which are dependent on infrastructure. So, we have seen significant slowdown in the latter but the former continues to grow — maybe at a little subdued pace.
India is enjoying significant GDP growth as compared to rest of the world. We are actively engaged in helping Indian companies grow rapidly.
How big is your local client base in India?
We work with multi-national companies (MNCs) worldwide, but our client base is primarily local in India. Without taking any names, we have clients across sectors. We have been present in India since 28 years, and have worked with most key players across these sectors. More than 50 per cent of our local business comes from Indian firms.
What is the difference in expectation between domestic companies and MNCs who have local set-ups?
They come to us more for similar needs. How they buy might be a bit different but their business issues are very similar. The reason for that is the global economy is changing fundamentally because of technology, and companies all over the world recognise this.
Some of the features of this digital change taking place include cheap technology, data and cloud. Companies are rethinking what they need to do globally and locally and trying to re-strike that balance. MNCs are right in the middle of this, and, therefore, their local operations are changing. It is exactly the same way in which a company in a local geography needs to go through changes. We call this “fit-for-growth”.
How do you see the Indian companies in your product segment being prepared to tackle digital onslaught?
Indian companies have the opportunity to leapfrog, because they don’t have a lot of legacy investments. Companies such as Mondelez, Fiat and Kelloggs have talked about what they want to change and these are global companies with operations around the world. But beyond that, the local companies (the privately held ones) have grown in the last 10-15 years. These are large companies and they can drive the same kind of effectiveness and efficiencies and can get fit just like these MNCs.
At Mondelez, we have looked at the way they buy things, and said: “Is there a smarter way to buy things? Can we actually create global contracts with vendors? Can we actually set policies that people comply with around the world? Do we have a better way to manage the vendors that sell us things in a new way that drives cost?” Not only does this improve cost, it sets standards in the way we operate our business worldwide. So the idea is to take out costs from one segment and reinvest this cost for building capability in other aspects of the business.
We have a concept for this, which is called zero-based budgeting . You can take that to a $500 million company in India and the same guidelines apply.
Which of these industries in your product category will have the maximum impact of digital change?
All of this change is about getting closer to the consumer. So I think that the two industries that are going through the biggest set of changes are the retailers that need to interact with consumers fundamentally differently (because of the whole digital world), and the consumer products companies that make things for retailers. Companies want to manage their consumer, want to understand them better. For instance, automotive companies know every aspect of every car they make. But that is not enough for them anymore, because when you push that button over your roof and the concierge comes on and says “how can I help you?” and now that's consumer relationship. Those are examples of how this is all changing and it’s quite dramatic.